“the architecture of the world is changing before our very eyes” Donald Tusk, President of the European Council

The world is changing, with trade wars, divisive politics and Brexit. These stem from powerful undercurrents including shifting global power (USto China), inequitable wealth distribution and global immigration. Add in an economic environment of strong corporate earnings, higher inflation and higher interest rates, and it is a complex (but interesting!) mix.

As a snapshot of markets at the moment, we like Credit Suisse’s insightful summary of its clients’ views:

• clients are selling growth stocks (note: growth stocks have outperformed value stocks since the GFC)
• while emerging markets stocks are very cheap, there are few catalysts to drive them higher
• 40% believe the USwill be the highest performing market for the next 3 months (this expectation is very high – almost the highest in 5 years)
• mostseeUS/Chinatrade tensions getting worse
• other key client trends include increasing questions around inflation and general economic cycle pessimism